The Commerce Department’s New Residential Construction Report shows housing starts and permits drifting lower.
Building Permits
- Privately‐owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,526,000.
- This is 2.4 percent below the revised September rate of 1,564,000 and is 10.1 percent below the October 2021 rate of 1,698,000.
- Single‐family authorizations in October were at a rate of 839,000; this is 3.6 percent below the revised September figure of 870,000.
- Authorizations of units in buildings with five units or more were at a rate of 633,000 in October.
Housing Starts
- Privately‐owned housing starts in October were at a seasonally adjusted annual rate of 1,425,000. This is 4.2 percent (±12.7 percent) below the revised September estimate of 1,488,000 and is 8.8 percent (±12.7 percent) below the October 2021 rate of 1,563,000.
- Single‐family housing starts in October were at a rate of 855,000; this is 6.1 percent (±13.4 percent)* below the revised September figure of 911,000.
- The October rate for units in buildings with five units or more was 556,000.
Housing Completions
- Privately‐owned housing completions in October were at a seasonally adjusted annual rate of 1,339,000.
- This is 6.4 percent (±10.6 percent)* below the revised September estimate of 1,431,000, but is 6.6 percent (±12.6 percent)* above the October 2021 rate of 1,256,000.
- Single‐family housing completions in October were at a rate of 961,000; this is 8.3 percent (±8.2 percent) below the revised September rate of 1,048,000.
- The October rate for units in buildings with five units or more was 362,000.
Unadjusted Starts, Permits, Completions
The SAAR numbers have a way of making numbers look much bigger than they are.
The above chart shows there were 121,000 starts in September vs the headline number of 1.425 million.
Housing Starts Single Family vs Multi-Family
Key Points
- Single-family starts have declined to 855,000 SAAR. That’s the lowest since 750,000 in May of 2020.
- Starts have been lower that the pre-covid rate for four consecutive months.
- Single-family starts have been lower that the pre-covid rate for five consecutive months.
- A year ago multi-family starts were 484,000 SAAR. Now they are 570,000. That’s an increase of 17.77%.
- A year ago single-family starts were 1,079,000 SAAR. Now they are 855,000. That’s a decline of 21.22%.
Comments on the Fed
- The Fed actively created a housing bubble a second time, by holding interest rates too low, to long again.
- The Fed added mortgages to its balance sheet all the way to March of 2022 despite surging inflation.
US Treasury Yield Curve Is One of the Most Inverted in History
Please note the US Treasury Yield Curve Is One of the Most Inverted in History
This is a strong recession signal.
The Fed actively seeks to pop the housing bubble that it created. Given policy acts with a lag, the Fed is likely to overshoot with a policy error in the opposite direction.
Is this anyway to run a country or a business?
This post originated at MishTalk.Com.
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The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for October 2022 shows mortgage applications for new home purchases decreased 28.6 percent compared to a year ago. Compared to September 2022, applications decreased by 13 percent. This change does not include any adjustment for typical seasonal patterns.
Mortgage credit availability decreased in October according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) that analyzes data from ICE Mortgage Technology.
The MCAI fell by 0.5 percent to 102.0 in October. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI decreased 1.5 percent, while the Government MCAI increased by 0.4 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 2.5 percent, and the Conforming MCAI remained unchanged.
“Mortgage credit availability declined for the eighth straight month in October to its lowest level since March 2013. Much higher mortgage rates and the worsening outlook for the housing market and economy are behind the continued tightening in credit availability,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Lenders continue to reduce their capacity and are eliminating some loan offerings, including certain types of refinance loan products and others that require less than full borrower documentation.”